Should Your Business Hire a Virtual Bookkeeper?
Fortunately, you can outsource parts of your business to freelancers, saving you time and potentially money. Specifically, many business owners hire virtual bookkeepers to maintain their day-to-day accounting responsibilities. This can be especially helpful as your business expands and routine accounting tasks accumulate.
A virtual bookkeeper can help your business stay on track and reduce costly errors. However, outsourcing any function of your business often comes with risks. While a virtual bookkeeper can be an ace up your sleeve, it’s also important to weigh all the pros and cons before hiring one.
Everything You Need to Know About Hiring a Virtual Bookkeeper:
What Is a Virtual Bookkeeper?
A virtual bookkeeper can provide routine accounting services for your business remotely. Since a virtual bookkeeper telecommutes, they can make their own hours and work from any location.
To enable a virtual bookkeeper to work remotely, business owners often provide access to their server, accounting software, and financial documents through a secure portal. The bookkeeper can then log into the network and perform the necessary services.
What Does a Virtual Bookkeeper Do?
Typically, a virtual bookkeeper performs the same functions as an in-house accountant or bookkeeper. Bookkeepers are generally responsible for processing the paperwork for your company’s business transactions and recording these transactions in the general ledger. In some cases, they may leverage this information to generate periodic financial statements for your business, such as an income statement, balance sheet, or statement of cash flows.
Advantages of Virtual Bookkeepers:
Hiring a virtual bookkeeper can benefit your small business in several ways, including:
- Cost savings: Since a virtual bookkeeper isn’t technically an employee of your company, you aren’t required to pay payroll taxes, provide them with a work-space, or offer benefits like healthcare. Better yet, you only pay them for the hours they work.According to GrowthForce, the average virtual bookkeeper costs $500 to $2,500 per month, whereas a full-time bookkeeper can cost you between $3,000 and $4,500 per month, plus the cost of benefits.
- Error reduction: Even if you’re skilled at bookkeeping, you probably don’t have time to ensure that all accounting tasks are performed correctly. Since 29 percent of small businesses fail due to cash flow issues, neglecting day-to-day accounting responsibilities can have serious consequences. Hiring a bookkeeper to focus explicitly on routine accounting tasks can reduce unintentional errors due to multitasking.
- More freedom to do what you do best: With day-to-day financial management removed from your to-do list, you can focus on the things that make you a great business leader — and use those skills to grow your company.
Disadvantages of Virtual Bookkeepers:
Of course, there are also disadvantages to outsourcing your company’s bookkeeping. Some of the primary downsides to hiring a virtual bookkeeper include:
- Reduced security: When you allow an outsider access to your internal systems, you run the risk that your proprietary information will find its way into the wrong person’s hands.
- Communication and logistical challenges: A freelancer may not always be available when you need immediate assistance. When working with a virtual bookkeeper, you might experience delays in communication and turnaround.
- Lack of industry- or company-specific knowledge: Virtual bookkeepers often serve a variety of companies and industries. Therefore, they may not have the necessary knowledge to point out potential risks to your business or make strategic recommendations.
How to Hire a Virtual Bookkeeper
The good news is that finding a reliable freelancer is easier than ever. A multitude of online platforms exist to connect small businesses with quality assistance. Popular sites include:
- Upwork: Upwork is a global freelancing platform where businesses and independent professionals connect and collaborate remotely.
- FlexJobs: FlexJobs posts jobs across more than 50 categories for freelancers and full-time candidates seeking flexible work. The service carefully screens employers and candidates to ensure a quality experience.
- VirtualVocations: Virtual Vocations is a job service that connects job-seekers with hand-screened telecommuting job leads. The site’s premium subscription model helps ensure that you’re only connected with serious candidates.
Bottom Line: Is a Virtual Bookkeeper Right for Your Business?
The decision of whether to hire a virtual bookkeeper comes down to your business’s goals and available resources. For many business owners, the pros of outsourcing routine accounting tasks far outweigh the cons. Still, it’s important to do your research and interview potential candidates thoroughly before sharing the details of your company finances.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.